Who needs to comply, and when the waves apply
Following the Omnibus adjustments, many large EU undertakings fall in scope when they meet both of the following on two consecutive balance sheet dates: at least 1,000 employees and more than €450 million net turnover (with further detail and carve-outs in the legal text). Listed small and medium enterprises retain a later entry point with proportionate standards, and third-country groups may be addressed through consolidated reporting at the EU parent level where applicable.
Application is staged in waves. The first wave is already producing sustainability statements for financial years beginning on or after 1 January 2024 for the largest listed and other public-interest entities already subject to the Non-Financial Reporting Directive. A second wave covers large non-listed EU undertakings for periods beginning on or after 1 January 2027, and a third wave covers listed SMEs (other than micro undertakings) for periods beginning on or after 1 January 2028, subject to the relevant exemptions and opt-outs in force.
For a jurisdiction-level view of EU rules and how they interact with your operations, see the European Union section of our climate policy library.
ESRS and double materiality
What the standards cover
Sustainability reporting under CSRD is anchored in the European Sustainability Reporting Standards (ESRS), adopted by the European Commission. They span cross-cutting requirements (governance, strategy, impacts, risks and opportunities, metrics and targets) and topical standards on environmental, social, and governance matters, including climate (E1), pollution, water, biodiversity, circular economy, own workforce, workers in the value chain, affected communities, consumers and end users, and business conduct.
Double materiality in practice
ESRS require a double materiality assessment. You identify sustainability matters that are material from an impact perspective (outward effects on people and the environment) and/or from a financial perspective (risks and opportunities that influence enterprise value). Typical steps include scanning your context and value chain, engaging stakeholders, scoring significance, documenting judgments, and linking outcomes to which disclosures and datapoints you publish. The assessment should be updated when facts change materially.
Data collection: Scope 1, 2, and 3
Climate-related disclosures under ESRS E1 expect coherent greenhouse gas inventories aligned with the GHG Protocol or compatible methods. Scope 1 covers direct emissions from owned or controlled sources. Scope 2 covers indirect emissions from purchased energy. Scope 3 covers other value chain emissions and is often the largest share for venues, events, and complex organisations.
- Define organisational and operational boundaries consistently with financial reporting and CSRD consolidation rules.
- Centralise activity data (energy, fuels, refrigerants, fleet, travel, goods and services) with clear ownership and audit trail.
- Plan Scope 3 category coverage proportionate to materiality, using primary data where feasible and documented estimates elsewhere.
For a refresher on scopes, our Scope 1, 2, and 3 emissions insight ties the same concepts to real-world operations.
Digital tagging, assurance, and value chain data
Structured electronic reporting
Listed issuers must prepare their management report, including the sustainability statement, in a single electronic reporting format built on EU-specified tagging (ESEF and the sustainability reporting taxonomy). That means disclosures need to be technically precise enough to map to the digital taxonomy, not only readable in PDF.
Assurance
Statutory auditors or independent assurance providers must provide limited assurance over sustainability reporting on a phased basis, moving toward reasonable assurance for certain undertakings over time as legislation specifies. Treat controls, documentation, and reconciliation with the same discipline as financial processes.
Value chain challenges
ESRS expect information on impacts, risks, and opportunities connected to the upstream and downstream value chain. Smaller suppliers may not yet report; you will need policies, estimates, and engagement programmes that are transparent about limitations. Early work on supplier data requests and contractual clauses reduces restatement risk later.
Tips for early preparation
- Run a dry-run double materiality process one cycle before your first mandatory year.
- Align sustainability metrics with finance calendars, consolidation, and internal controls.
- Engage assurance providers early on boundary choices, methodologies, and evidence expectations.
- Map ESRS datapoints to systems of record so tagging and XBRL preparation are not a last-minute overlay.
How 50X Impact helps
50X Labs built 50X Impact for teams that must connect operational data to framework-exact outputs without guesswork. The platform supports structured GHG inventories, preserves traceability from source evidence to reported figures, and helps organisations stay organised as CSRD, ESRS, and EU Taxonomy expectations evolve. Sustainability, finance, and operations can share one controlled dataset and a “Digital Twin” view of performance so disclosures stay consistent under assurance review.